Canada projects deficit 3 times larger than originally said

AP News
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Posted: Mar 22, 2016 5:04 PM

OTTAWA, Ontario (AP) — Canadian Prime Minister Justin Trudeau's new Liberal government projected Tuesday a federal deficit almost three times the size it promised during last year's election.

Finance Minister Bill Morneau predicted there will be a $29.4 billion Canadian deficit (US$22.4 billion) this year and made no mention of returning to a balanced budget. Trudeau had promised a $10 billion Canadian (US$7.6 billion) deficit during the election.

The budget includes more than $2.6 billion Canadian (US$2 billion) over five years for education on aboriginal reserves, plus nearly $1 billion over five years for education infrastructure. The government also promised millions for Canada's public broadcaster.

It also provides $5.6 billion Canadian (US$4.3 billion) more in benefits to veterans and their families over five years, but delays indefinitely a plan to spend billions more on procuring badly needed military ships, planes and vehicles. The promised re-equipping of the Canadian military has essentially been postponed until after the next election.

Canada's oil-rich economy has slowed as the price of crude as plummeted. The government assumes an oil price of US$40 a barrel this year.

The budget made no mention of a bailout for plane and train maker Bombardier, although a bailout package has been much discussed in Parliament and remains widely expected. The aerospace giant is seeking $1 billion Canadian (US$770 million) in federal support.